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Goldman Warns Euro Gains May Be Russian Bonds' Achilles Heel

  • Ruble’s drop against the euro is a risk to Russian bonds
  • Bank of Russia may be forced to scale back rate cuts: Goldman
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Sanctions from the U.S. have taken a toll on Russia’s local debt, but a bigger threat may lurk much closer to home.

While tougher U.S. penalties, first announced in June, put the breaks on gains in ruble bonds, the Russian central bank’s monetary easing is still luring investors to the debt, which is on track to deliver an 11 percent return in dollar terms this year.